The First ETF Listed on Qatar’s Stock Exchange has been Unveiled

In partnership with Doha Bank, Qatari investment firm Amwal has announced the launch of the first exchange traded fund (ETF) to be listed on the Qatar Stock Exchange.

The QE Index ETF (QETF) is a passively managed ETF that is designed to track the performance of the 20 largest and most liquid companies on the Qatar Stock Exchange. The unveiling of this ETF will help support the Qatari authorities’ push to improve liquidity in the market and attract more domestic and foreign investors.

In terms of sector weightings, Financials is the most dominant sector in the ETF (56.79%), while Basic Materials (14.7%), Communications (9.91%) and Industrials (9.7%) sport the next largest weightings. There is a cap of 15% that individual constituent allocations cannot exceed, similar to the underlying index.

There are three ways to buy share in the QETF:

On the Qatar Stock Exchange via a licensed broker.

On the Qatar Stock Exchange via the Appointed Liquidity Provider: The Group Securities. The Group will ensure that the ETF’s price is in line with the value of the underlying shares of the fund by maintain the supply of units.

Satisfying fund manager requirements to become an Authorised Participant, providing the individual or institution with the ability to create units in the ETF in minimum blocks of 25,000 shares.

The Qatar Stock Exchange has declined in the last nine months due to political tensions (source: Bloomberg)

Due to diplomatic issues with various countries in the Arab world, the Qatar Stock Exchange has experienced large and consistent declines and experience a fall of just over 20% between June 2017 and December 2017. It made a slight recovery at the beginning over 2018 before falling again recently. As of 5th March 2018 the market was down by 0.81% year-to-date.

Rashid Al Mansoori, CEO of the Qatar Stock Exchange, said the following:

“Great thought and effort has gone into the development of an ETF market at QSE and a listing based on our main index was always going to be a proud moment. There’s no denying the popularity of ETFs globally and we’re excited at the new trading opportunities the ETF provides to our investors.

Given the strong outlook for Qatar as an economy, the QETF is a key product offering for us and we look forward to the success of this ETF.” (source)

There is one other Qatar-focused ETF on the market, though it is not listed on the Qatar Stock Exchange. The iShares MSCI Qatar ETF (QAT) has a broader range of exposure to Qatari securities by tracking the MSCI All Qatar Capped Index. The QAT has 27 constituents with its largest weightings in Financials (52.74%), Industrials (16.75%) and Real Estate (10.70%). The ETF is currently up 1.05% year-to-date.